THE OFFICIAL PUBLICATION OF THE NEW JERSEY LAND TITLE...

MERS-Y MERS-Y ME!

THE OFFICIAL PUBLICATION OF THE NEW JERSEY LAND TITLE ASSOCIATION

Summer 2011

What is all this we are hearing about the MortgageElectronic Registration System [MERS®] lately? Didn’twe sort out all of the issues before MERS began operations back in April of 1997? Apparently not.

When the concept was first addressed in a “white paper”presented at the annual convention of the MortgageBankers Association in October of 1993, the industryresponse was very positive. It called for the establishmentof an electronic registry for tracking mortgage rights thatutilized existing technology and furthered the advancementof ’electronic commerce’ that is so familiar to all of usinvolved in the real estate transaction process today.

How many of those letters did you receive advising thatyour loan had been sold and that future mortgage payments were to be made to a new lender or servicingcompany? The sheer volume of mortgage assignmentswas bogging down the process with some loans changinghands several times before assignments could be recorded.Errors were frequent with some assignments beingrecorded out of order, creating serious title issues. Anelectronic registration system seemed like a very good ideaat the time, and the track record of the benefits derivedappear to hollow out the challenges and criticisms nowbeing heard.

The Mortgage Electronic Registration System, Inc., is awholly owned subsidiary of MERSCORP, Inc. It acts asthe mortgagee of record or assignee of the mortgagee ofrecord and as nominee for the lender and its successorsand assigns. When MERS is the mortgagee of record orassignee, the need for recording further mortgage assignments every time the mortgage is bought and sold iseliminated, improving the process and reducing the costto transfer and track the ownership of mortgage rights.Once a loan is registered with MERS, if the loan is sold orservicing rights are transferred or other changes to loanstatus occur (such as modifications, assumptions, substitution of collateral, renewals, extensions, or consolidations), that information is maintained and ableto be easily accessed on the MERS system.

To facilitate tracking, an 18 digit Mortgage IdentificationNumber [MIN] is assigned to each loan being registered.The MIN cannot be duplicated or reused and neverchanges over the life of the loan. The MIN is clearly setforth on the first page of every MERS registered mortgageinstrument, together with the MERS toll free telephone

number. By calling the number and inputting the 18digit MIN, current information as to the identity of theowner and the servicer can be obtained, together withcontact information. A hard copy confirmation is alsoavailable by inputting a fax number. Surely there is a copyof a MERS registered mortgage somewhere in your office.Dial the 800 number and input the MIN. The use oftechnology is a wonderful thing.

Despite what some critics may have asserted, the MERSSystem is not a substitute for recording and will notresult, intentionally or otherwise, in the demise of therecording system that has been in place since the 1700’s.The mortgage or an assignment into MERS must still berecorded in the local land records in order to perfect themortgage lien or transfer the lien of record to or fromMERS. It is merely an electronic information storageand retrieval system constituting a registry of the beneficial ownership of mortgage interests for whichMERS acts as nominee.

Sounds like an innovative use of technology in furtherance of the best interests of the industry, but did itcatch on? Indeed it did. MERS calculated in 1997 after10 years in operation that it saved the industry $1 billiondollars in recording and processing fees. At the height ofthe market, some 60 million mortgages were registered onthe system, including 97% of residential loans originatedfrom 2005-2008. Today, approximately 31 million activeresidential mortgages are registered.

MERS operates under a set of rules with which MERSMembers agree to comply by signing a MembershipAgreement. There are presently about 5,000 participating Members with about 3,000 being residentialmortgage servicers. MERS designates officers or employees of Members as “certifying officers” who areauthorized to execute documents in the name of MERSsuch as assignments, discharges, and foreclosure papers.Rule 8 of the MERSCORP Rules of Membership clearlyset forth the manner in which foreclosure actions are tobe processed in the event a beneficial owner or its designated servicer determines that foreclosure proceedings are to be conducted under the name of theMortgage Electronic Registration System. Even if 99% ofall actions are perfectly processed, that still leaves quite alarge number where problems may exist. MERS has notbeen immune to the issues identified as plaguing the foreclosure process in late 2010.

IN THIS ISSUE:President’s Corner...............................4

Definitions of “Signature” Construed .....................5

Alexis Decarvalho Awarded 2011John R. Weigel Scholarship .............6

NJLTA Honors Monmouth County Clerk M. Claire French ....................6

Agency Perspective .............................8

“In Defense of Our Title!” .........10-11

Ask the Expert .................................12

NJLTA Welcomes A New Class of Certified Title Professionals .....14

Honorary Membership Bestowed Upon Lydia Fowler, CTP................15

NJ Title Insurance PoliticalAction Committee..........................16

Notary Quiz ......................................16

Qualified Residential Mortgage:Reshaping the Real Estate Financing Paradigm.................18-19

ALTA Advocacy Update ......................20

In The News .....................................21

Word Search .....................................22

Dates To Remember .........................23

By: Lawrence C Bell, Esq.

continued...

MERS-Y MERS-Y ME!

The robo-signer defenses asserting that foreclosure complaints and affidavits are beingsigned without personal knowledge are beingraised against MERS “certifying officers” whoare employees of Member lenders or servicers.Questions are also being asked as to how anemployee of a lender can also be an “officer” ofMERS without regard to the contractual provisions contained in MERS MembershipAgreements. As with the rest of the mortgageindustry, strict adherence to state requirementsand the tightening up of practices and procedures are being pursued.

The Federal Reserve System, the Office ofThrift Supervision, the Federal DepositInsurance Corporation and the Office of theController of the Currency recently conductedon-site reviews at 14 federally regulated mortgage servicers and issued findings in anApril 2011 report titled “Interagency Review ofForeclosure Policies and Practices.” The reportidentifies instances of ’foreclosure-processingweaknesses’ occurring nationwide and theimpact of those weaknesses on the process.MERSCORP and its MERS subsidiary weresubject to an on-site review with weaknessesidentified in oversight, management supervisionand corporate governance including instances ofa failure to conduct appropriate due diligenceassessments and a failure to monitor, evaluateand manage the contractual relationshipbetween MERS and its Members.

MERSCORP entered into a Consent Order onApril 13, addressing the identified issues, andissued a press release stating: “As the ConsentOrder notes, MERSCORP, Inc. and its subsidiary, Mortgage Electronic RegistrationSystems, Inc., are already actively implementing

changes that tighten corporate governance,improve internal controls, and address qualityassurance issues identified by the company andthe Agencies in the course of this review.” “TheInteragency Review provided us with some clearguidance on how we can do better,” said MERS’Chairman, Kurt Pfotenhauer. “MERS bringsvalue to the real estate system today, and we’reconfident that the changes we’re making willenhance that value.”

With the present volume of foreclosures beingprocessed in New Jersey and across the country,challenges to foreclosures conducted in MERS’name are being more frequently raised. Theargument is that MERS lacks the authority toforeclose or that MERS lacks the standing nec-essary to bring suit. While some challenges aremeeting with occasional success on fact depen-dant defenses, these theories are ultimatelybeing rejected by the Courts, citing languagecontained in MERS mortgage instruments thatsays:

“Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.”

Another theory being raised in defense of foreclosure actions brought in the name ofMERS challenges the process of the mortgage

note being retained by the lender, or endorsedin blank and transferred to succeeding lenderswhile the borrower and the lender agree to designate MERS as the beneficiary under themortgage. The argument is that severing thepayment obligation under the note from thesecurity interest under the mortgage renders themortgage unenforceable. While this “split thenote” theory has met with limited success in afew jurisdictions, the argument has been moreuniformly rejected by Courts applying UniformCommercial Code provisions.

Ultimately, borrowers in default are not meeting with much success asserting what somehave called the “Olly Olly Oxen Free” position:That they own their homes free and clear of themortgage being foreclosed arguing that due to the involvement of the Mortgage ElectronicRegistration System, their mortgage is unenforceable, not capable of being perfected,or that no valid lien exists on their property.

While there are those who claim that MERS isdead [just Google “No life on MERS” and follow the strings], the reality is that MERS is alot closer to being a part of the solution than tobeing a part of the problem. The application oftechnology to the real estate transaction processis here to stay and electronic commerce will continue to evolve and mature in ways that canbarely be imagined today. Check back in 10years. You won’t believe what you see.

LAWRENCE C. BELL is RegionalUnderwriting Counsel, Northeast/Mid-AtlanticRegion, for Stewart Title Guaranty Company.The views and opinions expressed herein are solely those of the author and not his employer orthe NJLTA.

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Mission Statement

To be a voice of our Members reaching out to each other to strengthen our common goals

To honor our own who exemplify all that is good about the industry

To nurture the relationship between the New Jersey Land Title Association and the industry

To provide a resource for education and best practices in the industry

And to be a witness to our professionalism and high standards.

The ADVOCATE’s

continued...

My mother always told me that life’s most precious gift is ’time’. That time is something that no otherperson can give or extend. To make wise choices for each second and that those seconds will take care ofthe minutes; the minutes will take care of the hours and the hours will take care of one’s lifetime... One’slife can ultimately be measured by how their time was spent. I believe that one’s lifetime is not measuredby the possessions that they own or the amount of money saved but how they positively impacted another individual or society as a whole. To ultimately alter the path of another person’s day, week, year,lifetime in a positive manner is life’s gift. These life altering experiences can be as simple as holding a doorfor another or greeting someone with a warm hello...

During my early years in the NJ Title industry there were a number of individuals who positively alteredmy career path. I admired Fineberg, Way, Koch, Grabas and Rossetti from a distance andwatched/learned/appreciated how they positively impacted the New Jersey Title Industry. Their selflesscontributions of ’time’ made our industry better and we are all better for it. The fact is there are manyothers who also have made the commitment of ’time’ for all of our benefit; a list that is too long to countbut individuals who made ’their’ mark. Internally I aspired to be like those before me, to make a difference, leave my mark, to have a positive impact on those around me. Contrary to what my brotherand sister may say, I really don’t think I came from the shallow end of our family gene pool... All kiddingaside my brother and sister truly inspire me both personally and professionally. They are individuals wholead by example and are extremely well respected in their professions and their respective communities.They live each day with purpose and to ultimately make a difference in the lives of those they teach.

Several years ago I observed firsthand the frustration of my underwriting attorneys who were spending aninordinate amount of time in the seemingly thankless task of writing indemnification letters. In an effortto streamline this process and make it more efficient, not only for my counsel, but for the industry as awhole, I researched the procedures used in other states and retrieved the documentation which formedthe basis of the New Jersey Inter-Underwriter Indemnification Agreement. I passed this informationalong to NJLTA Executive Director Edward Eastman and the rest is history. A collaborative effort andmany painstaking hours by our industry’s very best legal minds drafted the New Jersey IndemnificationTreaty as we know it today. During my tenure the Board of Governors’ has fended off outside attacks ofClass Action Law Suits, escalated industry scrutiny to the validity of our product and most importantlyprotecting the interests of our agents. I am proud to have been a part of these achievements. Most recently there is a pending decision by DOBI to increase settlement fees to help ease the agents cost ofconducting a closing. I am sure everyone would agree that this process has become extremely labor intensive and cost prohibitive to the agent. Lastly, the revamping of our industry web site is to beunveiled at the convention and promises to be both underwriter and agent friendly. Again, all examplesof what the Board of Governors has done to make our industry better.

I am proud to have been involved during this time and although the economy has been crippling the fightto defend and improve it, our industry goes on... I encourage you to secure your place in time by gettinginvolved and making a difference... Time waits for no one, so don’t try to save your seconds; getinvolved and leave yourmark...

Danny

Having the opportunity to serve on the NJLTA Executive Board during the past four years has been a privilege and to be entrusted by my industry peers to hold this position has been an honor. I thank all of myfellow Executive Board Members, The Board of Governors, Committee Chairs; their members and most of allExecutive Director, Edward Eastman for all his guidance during these past four years.

THE PRES IDENT ’S CORNER WITH DAN MAY

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A recent unreported decision by the Appellate Division, Pear Street,LLC v. 818 Pear Street, LLC (A-1494-09T2; decided Jan. 4 2011),has interpreted an obscure section of Title 46, which defines “signature”. Plaintiff Pear Street, LLC filed suit to invalidate a deedpurportedly made by plaintiff (grantor) to defendant 818 PearStreet, LLC (grantee), but “executed” by affixing a rubber stampcontaining the signature of the principal of plaintiff Pear Street. Thesignature stamp was employed by the principal of defendant 818Pear Street. Although the deed was not [properly] acknowledged, itwas nevertheless accepted for recording by the county clerk.

Carol Rodriguez purchased the realty known as 818 Pear Street inVineland in 1998. In 2005, title was conveyed to Pear Street, LLC,of which Carol was the sole member. Angelo Rodriguez, Carol’s son,was in the business of purchasing, refurbishing, and re-selling homes.Carol owned a company called Andesco, which facilitated Angelo’sbusiness operations. Angelo held an interest in Andesco, and wasresponsible for its day-to-day operations. Accordingly, Carol entrusted Angelo with her signature stamp. The property located at818 Pear Street was being refurbished by Angelo as part of his business.

In December, 2005, Angelo prepared a deed from 818 Pear Street,LLC to Pear Street, LLC, an entity controlled by him, and “executed” the deed by affixing Carol’s signature stamp. The deedwas recorded in the Cumberland County Clerk’s Office, eventhough it was not [properly] acknowledged. Angelo did this in orderto obtain a loan, which was secured by a mortgage encumbering therealty. Unfortunately, Angelo took his own life in February, 2007.

Pear Street filed suit to set aside the deed and mortgage. The

Chancery Division found that Angelo employed Carol’s signaturestamp to execute the deed with her tacit consent. In affirming thevalidity of the deed, the court relied on N.J.S.A. 46:14-4.2 whichdefines signature to include “… any mark made on a document onbehalf of a person, with that person’s authority and to effectuate thatperson’s intent”. Furthermore, the lack of [proper] acknowledgmentdid not affect the validity of the deed as between grantor andgrantee.

The Appellate Division affirmed the judgment of the ChanceryDivision in a per curiam opinion. It agreed with the trial court’sapplication of N.J.S.A. 46:14-4.2 to the facts of the case. The panelrejected the argument that the statute requires the “physical presence” of the grantor when its signature is affixed by anotherparty. It noted that the enactment relating to the execution of wills,N.J.S.A. 3B:3-2(a)(2), does contain a physical presence require-ment, and the Legislature could have inserted similar wording inTitle 46, had it chosen to do so.

Finally, the Appellate Division affirmed the trial court’s holding thatthe lack of [proper] acknowledgment did not affect the validity ofthe deed. Acknowledgment is a pre- requisite to recording; but anunrecorded or improperly recorded deed is nevertheless valid asbetween the parties thereto. See Siligato v. State, 268 N.J. Super. 21(App. Div. 1993).

Lawrence J. Fineberg is Vice President and Regional Counsel for FidelityNational Title Group in East Brunswick. This article originally appeared in TitleTalk No. 77 (Winter 2011) and is reprinted here with permission.

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The New Jersey Land Title Association is pleased to announce that Alexis DeCarvalho of MonmouthBeach, New Jersey is this year’s winner of the John R. Weigel Scholarship Award. Named in honor of theAssociation’s Director Emeritus who served the title insurance industry with great distinction for overtwenty years, this award will provide Alexis with an $8,000.00 scholarship which will be paid over 4 years.

A senior at Shore Regional High School, Alexis will be attending Monmouth University this fall and isplanning on studying physical science after which she hopes to pursue a career in Physical Therapy. As astudent athlete who in her fourth year of participation was captain of Shore Regional’s girl’s varsity soccerteam, Alexis also maintained an excellent academic record earning her selection to the National HonorSociety in her junior year. She was also consistently named to the High Honor Roll. In addition to athletics and academics, Alexis also made time in her busy schedule to volunteer with a number of schooland community organizations including Students Against Destructive Decisions, the Rotary InteractService Club, and the Shana Wasserman Foundation. Alexis’s mother, Lisa, is an employee of AgencySection member Two Rivers Title Company, LLC.

“Once again, our Scholarship Committee had their work cut out for them,” said NJLTA President DanMay after the award was announced. “All of the applicants had excellent and unique qualifications. Weare proud to be able to help support such a promising student as Alexis.”

The John R. Weigel Scholarship, which was inaugurated in 1998, is awarded once per year to a qualifiedcandidate for higher education arising out of a title industry connection. Academic achievement,extracurricular activities and public service experience are all required of eligible candidates. In addition,award winners must continue to satisfy the eligibility requirements throughout the four-year period during which their scholarship is paid. The scholarship is underwritten by both the Underwriter andAgency Section members of the New Jersey Land Title Association.

Alexis joins past scholarship winners, Katherine Ramler (1998), Theresa Hayes (1999), Elliot Fineberg(2000), John T. Wenzel (2001), Kathryn Anne Cannito (2002), Lauren Usignol (2003), Alex Fineberg(2004), Pamela Kubinsky (2005), Danielle Panccione (2006), Kyle Wilson (2007), Michael Ham(2008), Brielle Grabas (2009), and Kacie Baker (2010).

ALEXIS DECARVALHO AWARDED2011 JOHN R . WEIGEL SCHOLARSHIP

NJLTA HONORS MONMOUTHCOUNTY CLERK M. CLAIRE FRENCH

The New Jersey Land Title Association has announced that the first recipient of thenewly-created Presidential Award will be Monmouth County Clerk, M. Claire French.Citing Mrs. French’s cutting edge efforts in the advancement of county recording systems,this award will be formally presented at the President’s Gala at the NJLTA Business andEducation Convention on Monday, May 23 at the Crystal Springs Resort.

Elected as the Monmouth County Clerk in 1997, a time when the application of electronic technology to recording processes was beginning to take hold, Mrs. French hadthe vision to propose and oversee the creation of New Jersey’s e-recording Portal. At aninitial cost of nearly one million dollars, the Portal, which was designed by SunriseSystems, Inc., allows New Jersey’s participating counties to achieve a level of electronicrecording regardless of the imaging system they have in use. Presently 12 of New Jersey’scounties participate. The Portal has received several awards for Technology inGovernment from the State of New Jersey.

M. Claire French

Welcome to the 2011 New Jersey Land Title AssociationBusiness and Education Convention at Crystal SpringsResort in Hamburg, New Jersey. Welcome home to NewJersey. It’s good to be home. Thank you for coming.

Thank you for taking time out of your busy lives to join usat the annual celebration of our industry. As I write thisarticle in April, I only hope that many agents have affordedthemselves the opportunity to partake of the conventionactivities for $25.00. Those who have done so shouldthank the Agency Section for deciding to underwrite theirattendance to the tune of $250.00. You should also thankAmy Holder and her convention committee for holdingthe line on the convention registration fee at $275.00.How do they do it? One way is thanks to our sponsors,whose contributions offset some of the costs. So, let’s thankour convention sponsors and make sure to use their servicesthroughout the year.

Speaking of sponsors, the Agency Section wishes to thankFirst American Title Insurance Company and Stewart TitleGuaranty Company for sponsoring and conducting ourseminars on January 25, 2011 and March 22, 2011, respectively. Their sponsorship allowed us to present theseminars free of charge for our member agencies and theiremployees. First American’s seminar was a lively and informative “game show” format with at least seven of theiremployees “on stage” in various roles. Larry Bell, who wentit alone at the Stewart Title seminar, is an excellent speakerand was able to make the time fly, particularly consideringwhat could otherwise have been the dry topic of title related case law. The sponsors also paid for the buffet mealsat each seminar.

For those planning ahead, the Agency Section hasannounced its upcoming free seminars, all at 4PM at theHoliday Inn in East Windsor. The dates are September 26,2011, January 24, 2012 and March 27, 2012. WestcorLand Title Insurance has agreed to sponsor the September26, 2011 seminar. Underwriter sponsorships are still available for the seminars next January and March.Registration for the seminars will be free, but those who failto appear without giving 24 hours written notice areassessed a $50.00 cancellation fee. And remember that theAgency Section Management Board holds its meeting inthe same room, just before the seminars, beginning at2:30PM. If only our membership showed as much interestin the Board’s activities as in the seminar! There were 150attendees at the 4PM March seminar, but only 20 people atthe 2:30PM Board meeting (and that included 6 Boardmembers). Please come out early to see the Board at work. Remember, we work for you and your input and participation are important to our mission.

Thanks to a special committee of the NJLTA, we now havea redesigned logo for the organization and for the mastheadof this publication. Please check out the revision of theNJLTA website at www.njlta.org. The agency section’sSteven Goldstein and Casey Brown ser ve on that committee and worked hard to coordinate the launch ofthe logo and website with the date of the convention.

Members of the Agency Section should express theirthanks to the many esteemed members of our organizationwho g ive of their time year after year. In many organizations individuals work their way up the chairs and,after serving their time in hell, disappear, never to be heardfrom again. But the NJLTA has a bullpen full of “mostvaluable players” who continue to offer their services in avariety of positions. In our own Agency Section we haveAll-Stars, Al Santoro, Elissa Buonarota, Isi Teitelbaum,Beth Way, Mike Grant, Joe Grabas, and Len Rossetti; allpast Presidents of the NJLTA (twice over for Len) and allstill actively involved in the Association and in our AgencySection. Give thanks for this depth of experience.

On behalf of the Agency Section Management Board Iwish to thank Tom Rafferty for his years of service to ourSection. As Immediate Past Chairman, he can be proud ofthe service he has given to the NJ Title Industry. His leadership and experience are already missed. It seems atone time or another Tom has been a dedicated and activemember of almost every committee in the NJLTA. On apersonal note, Tom is responsible for asking me to becomere-involved with the NJLTA (after I spent years away,attempting to make a living as a title agent). Tom alsoencouraged me to write this series of columns for theAgency Section. I don’t know whether to thank him orcurse him, but I do offer him best wishes, with hope forhappiness in all the additional free time he will find in his“life after the Agency Section”.

Subject to a vote of membership at the convention, StevenGoldstein will become the new Chairman of the AgencySection Management Board, with Cindy Ward as Vice-Chair/Treasurer and Casey Brown as Secretary. Theat-large Members are our veterans, Al Santoro, GeorgeWatson, Jr. and yours truly. We welcome Anthony Floria-Callori as an incoming Board Member.

Oh, and just one final thanks to those of you who read allthe way to the end of this column.

George A. Stickel, Esq. is a Third Generation, 40 year veteran of the titleindustry. He is President of Stickel Title Agency in Pennington, NewJersey. George is a member of the NJLTA Agency Section ManagementBoard and a contributing writer to The Advocate.

AGENCY PER SPECTIVE : THANK YOU. NO, THANK YOU!

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By George A. Stickel, Esq.

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The Sussex men moved steadily towards the outskirts of town, with firein their eyes and violence in their hearts. Tonight they would settle oldscores. The time for surveyors and commissioners, deeds and patentsand broken agreements was in the past. Tonight the line would bedrawn for good and not even Old Jacobus Swartwout could save theYorkers.

It was Sunday and the Jerseymen, led by Johannes Westfall, chose thisday specifically because they knew that all the usurpers and brigandswould be at the Old Maghackemeek Dutch Church for services - theSwartwouts, Westbrooks, Cuddebacks, Gumaers and if they were lucky,that bastard Thomas Dekay!

Although 11 years had passed, no one in Sussex could forget how thesimple Quaker, John Herring, was brutally beaten by Orange CountyJustice of the Peace, Colonel Tom Dekay and his ill-bred sons. Herringwas out on horseback with surveyors Peter Decker and Richard Gardnerwhen he was beset upon by James, George and Jack DeKay, Thomas’sons. James had a club and was spoiling for a fight. Just then Col. Dekayrode up, snatched the hickory walking stickout of John Herring’s hand and began pummeling him with it. Blood flowed andfell upon the ground. Dekay struck Herringover twenty blows, until the stick shatteredin his hands. In a fit of rage he then turnedon Richard Gardner, beating him while his sons pilfered Gardner’s surveying instruments and rode off with them. Itwould take John Herring months to recoverfrom his wounds, for he did not fight back asit was against his faith.

But God help DeKay if he was attending services this day. Dekay had violated thePeace and the Sussex boys were here to exactJustice for John Herring and all the otherJerseymen who had suffered the Yorkers’stealing or burning their crops, attackingtheir homes and encroaching on their lands.They had justly paid for their Patents fromthe East Jersey Proprietors and they refusedto pay quitrents to New York or serve intheir militia. They were Jerseymen, sons and grandsons of the originalsettlers, those who had been lied to, swindled, beaten, cursed and burntout, who had survived the feckless Agreements of 1684, 1719, 1747 andbeen encroached upon by the infamous “Floating Patents” issued byGovernor Lord Cornbury to his cronies.

As they approached the church, Simon Westfall let out a fiendish howland the others joined in. It was the sound of eighty years of frustrationand the determination to finish old battles. The Preacher burst throughthe church doors and confronted Westfall and his men. “Good GodMan, let ye be at peace and go from the Lords house.” Johannes Westfallwould not be deterred, although being a good Christian man, he agreedthat weapons had no place on the Sabbath. With that, the Jerseymendropped their weapons and set upon the Yorkers and fists began to fly!It was a brawl of epic proportions; fighting hand to hand, no one left thechurch unbloodied. The Sussex Boys won the day and carted MajorJacobus Swartwout and Captain Johannes Westbrook off to the SussexCounty Jail for a dose of Jersey hospitality.

All this occurred in Port Jervis, NY just 19 miles from Hamburg, NJ ona Sunday in 1765. It was the last major battle in the NJ Line War thathad been engaged on and off for the last 80 years. It would be 8 more

years before King George would finally affirm the negotiated boundarybetween New Jersey and New York on the eve of a much greater battlethat would change the course of human history.

These events were placed in motion on June 23, 1664 when James, Dukeof York conveyed the better part of his domain in the colonies to SirGeorge Carteret and Lord John Berkeley. The description appearedsimple. The boundaries of New Jersey ended in every direction onceyour feet got wet; the Hudson River, Atlantic Ocean, Delaware Bay andthe Delaware River; except for the Northern boundary.

The Northern Boundary was well defined in the deed by reference topoints of Latitude, 41 degrees 40 minutes on the Delaware and 41degrees on the Hudson. Just draw a line between these two points andyou have closure. Except the description was drawn in England, by menwho had never visited New Jersey, of land that few white men had everseen and based upon a 1656 Map prepared by Nicholas J. Visscher, aDutch Cartographer who had never wandered beyond the confines of Europe.

Now, this was not unusual for the time. Thefirst map of the newly discovered World wasprepared in 1507 by German cartographer,Martin Waldseemuller. He drew it at hisdrafting table in Saint-Dié-des-Vosges, thousands of miles away from the NewWorld and he did it without the benefit ofsurveys, just the narrative Four Voyages ofAmerico Vespucci. It was at that momentthat the continents in the new hemispherewere named America.

With that same leap of faith and limit ofknowledge, The Duke of York relied uponthe Visscher map, severing New Jersey from New York. Col. Richard Nicolls complained that the Duke had given away“all the improveable part” of his land. Nicollsnoted that “the fertility of the soyle the neighborhood to Hudsons River, and lastly thefaire hopes of Rich mines” in New Jerseyproved it to be the better of the two colonies.

No one knew where 41 degrees 40 minutes was on the Delaware Riveror even if the river crossed that line of latitude. After passing North ofthe great Lenape village of Minnisink, no one knew which branch wasthe source of the Delaware River. In 1664 the instruments necessary todetermine latitude with any manner of precision, did not exist in theNew World.

And so in 1686 New York’s Governor Dongen conveyed the first landgrant, the Tappan Patent, over and along the dividing line and theGordian journey began; to determine the exact location of the boundarybetween New Jersey and New York. We must remember that the Dukeof York and the Proprietors were essentially land speculators. The sooner this source of revenue began to flow, the happier they would be. The fact that the various parties might be conveying the same lands,creating overlapping boundaries lines, was of little concern. (See ThisLand is My Land, Your Land is My Land in Advocate Issue Fall 2010 for further discussion).

In a rush to make a profit and lay claim to as much land as possible, theNY & NJ Proprietors provided erroneous land grants leaving the bona fide purchasers to their own recourse; which would require themto literally defend their own titles, as title insurance would not be

“ IN DEFENSE OF OUR TITLE!”By Joseph A. Grabas, CTP

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available for quite some time to come. However, this would not be theonly war fought over colonial boundaries. Practically every colony had abone to pick with their neighbors. The Mason Dixon Line was theresult of Cresap’s War between Pennsylvania and Maryland.Connecticut battled Pennsylvania for the area in and around present dayWillkes Barre. Known as the Pennamite-Yankee Wars, beginning in1769 and pausing briefly for the American Revolution, this armed conflict picked up again in 1781 and was not resolved until 1799 afterseveral people had lost their lives.

It isn’t known who struck the first blow in the NJ Line War, but it surely wasn’t long after that first grant in 1686. By 1701 the Swartwoutsof NY and the Westfalls of NJ had established themselves as the de factoleaders of the warring factions. By this time many conflicting grants hadbeen issued by New York and East Jersey.

The first attempt to draw a line was in September of 1686. Three surveyors George Keith for East Jersey, Andrew Robinson for WestJersey and Philip Wells for New York, were to meet at the “forks of theDelaware” and determine the Westerly end of the line. They reportedback that they had located each end of the line, but for some unknownreason the line was never drawn and surveyed. Not until 1718 did thetwo colonial assemblies take up the matter again and passed acts to runand set the line. The next year commissioners were selected and theSurveyors General of each colony, James Alexander of New Jersey andAllane Jarratt of New York, performed the necessary surveys and concluded the matter by drafting the TriPartite Indenture which wasexecuted by New York, East Jersey & West Jersey setting forth the definitive dividing line. Within two months Allane Jarratt came forward, after having signed the deed and claimed that the instrumentsused for the survey were defective.

He had been gotten to by the Delauncey family, most specifically NewYork’s Lt. Governor Stephen Delauncey who owned land along the border. Jarratt was handsomely rewarded with grants of land inWestern New York. Delauncey was one of the benefactors of the notorious Floating Patents issued by Lord Cornbury. In 1702 QueenAnne rescinded the NJ Proprietors right to govern the colony andinstalled her cousin (a purported transvestite) as the Governor of bothNew York and New Jersey. Many people thought that this would be aperfect opportunity to settle the boundary issue. Unfortunately in aneffort to enrich his friends, Cornbury issued floating patents along theboundary, the first of which was in 1703 called the Wawayanda Patentthat conveyed between 60,000 and 350,000 acres of land, dependingupon where the boundary line would eventually be laid. A year later,Cornbury conveyed the Minisink Patent of over 160,000 acres to afriend. Of course the NY purchasers immediately began to settle and layclaim to the largest amount of land that the Floating Patents could comprise, some of which had already been conveyed by the East JerseyBoard of Proprietors and cultivated by its owners.

Now the violence began in earnest, burning crops, stoning homes, beatings, stealing, outlandish accusations, name calling and much worse.Whether it be a duel between Jacobus Swartwout and Johannes Westfallwith pumpkins at twenty paces or a full set piece battle between the NJand NY militias on the open field, tensions were high and the insultscompounding. The unification of both governments under one manonly made the situation worse. Cornbury never took any act to solve the problem.

In 1747 New Jersey tried to run the line ex parte but could not get approval from London due to the petitions of notable New Yorkfamilies. What now ensued was a blistering correspondence betweenNJ’s Governor Belcher and our old friend Lt Gov Delauncey.

Considerable intrigue occurredbetween the Governors andAssemblies of NJ and NY, theBoard of Trade in London, theKing and various Agents andFactors for the parties involved.

Another twenty years wouldpass before a Commission wasreceived from London to proceed in the settlement ofthe Boundary Line. A Board ofCommissioners was appointedwith luminaries from the various colonies from Quebecto Virginia, notable amongstthem was Benjamin Franklinand a young John Jay, thefuture first Chief Justice of theSupreme Court. Both sides presented their cases, New York being represented by William Bayard, et als and New Jersey by John Stevens, etals. (See Hoboken: The Last Attainder in Advocate Issue Winter 2010 for more onBayard & Stevens).

Both sides commissioned new surveys, presented documentation andmade their arguments. The Northerly line in the original Royal Grantwas described as: “and to the northward as far as the northernmost branchof the said Bay or River of Delaware, which is in forty-one degrees and fortyminutes of latitude and crosseth over thence in a straight line to Hudson’sRiver in forty-one degrees of latitude…”

On October 7, 1769, the Commissioners, not including BenjaminFranklin, came down with an astonishing decision. They located theNorthern Station of the dividing line, NOT at the actual NorthernmostBranch of the Delaware and NOT at 41 degrees 40 minutes latitude.Instead they agreed upon 41 degrees 21 minutes and 37 seconds latitude,claiming that where the Delaware turns West at Port Jervis is the northernmost branch. This resulted in the loss to New Jersey of over210,000 acres of land. We Got Robbed! The fix was in and althoughNew Jersey appealed the decision it was to no avail. Eventually theLegislature of New York and New Jersey passed Acts confirming the lineon February 16, 1771 and September 26, 1772 respectively and Royalapproval was given on the 1st of September, 1773.

The line was run on the ground and so ends the story. Not so fast! In1896 the line had to be physically run again. It was found that due tothe high iron ore content in the ground along the line, that the surveyinginstruments used in 1769 were adversely affected and that the necessarycompensation and adjustments were not made at the time. The line was crooked! So more than a century later the line was corrected,straightened out and monuments were set. Today peace and harmonyreigns along the border, although it seems New Jersey has never beensuccessful in keeping those Yorkers away from the Jersey shore.

Joseph A. Grabas, CTP is a title researcher, agent, educator, historian andgenealogist with 33 years experience in the title industry. He has a degree inEarly American History from Monmouth University. He is a member of theNew Jersey Historical Society, Monmouth County Historical Society,Monmouth County Genealogical Society, Genealogical Society of New Jerseyand the Ellis Island Foundation. This is part of a continuing series about theorigins of land titles & boundaries in New Jersey.

ASK THE EXPERT

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Dear Expert,

Dear Inquirer,

Dear Expert,

Dear Reader,

On a commercial project, title had been vested in H & W (husband and wife) as tenants by the entirety as to their50% interest, and as a tenant in common with C who had a 50% interest. In 1994 H, W, and C conveyed all of theirright, title and interest in the project to an LLC of which H was a member, together with P1 and P2. In 2003, Cbrought an action in Superior Court asserting a claim of fraud against H, W and the LLC. He seeks accumulatedrentals, profits, etc. and ultimately, there is a Consent Order issued which orders the LLC to convey title back to itsoriginal state - H & W and C. In addition, C is to be paid $10 million for all of his claims. In order to raise thismoney, the LLC will simultaneously take a deed back from H, W, and C, and then place a new mortgage on theproperty for $15 million, $10 to pay C and $5 to pay off an existing mortgage. Since C will be in title and then convey back to the LLC, we run him in judgments and find $7 million worth of judgments against him. The attorneyfor the LLC is concerned that if C obtains Warrants of satisfaction for less than the full value of the judgments, oncethe creditors discover that C had a $10 million payday, they may move to have the Warrants set aside as beingobtained fraudulently. What should our position be regarding:

1. Holding escrows for the judgments2. Inquiring as to the value paid for the Warrants

Your Inquirer.

One or more of your customers certainly seems to have lost his or her moral compass, but that does not affect title.As to the judgments, though, the problems are not that complicated. I would hold the full $10 million as a securitydeposit (not an escrow, as an escrow is a 3 party agreement with the escrow holder being a neutral party having nointerest in the matter) to insure without exception to the judgments. I do not believe that there is any duty to inquireas to the consideration paid for the satisfactions BUT, if they were not for payment IN FULL, they must be signedby the attorney AND the creditor . . . and, unless furnished you directly by the creditor’s attorney, you should verifythe authenticity thereof with the attorney. It is not you duty to make sure that a “fair” deal has been negotiated.

The Expert.

I have a proposed sale of real estate, occupied by husband & wife, where a Pre-Nuptial Agreement exists. The “Pre-Nup” clearly states that prior to the marriage, what’s his is his & what’s hers is hers (she has much less thanhim). I have been told that she was advised to obtain legal counsel, however, I don’t know if she did. What is youropinion?

Your Faithful Reader.

You have not told me who is in title so I need to answer this in light of several potential variations. If both husbandand wife are in title, then both must sign the deed. That’s the easy version. If, however, husband/wife is alone in title,then (assuming that it was acquired after 1980, when Dower and Curtesy were abolished) wife/husband has nointerest in the property other than a principal matrimonial possessory interest. That, of course, must be terminated.The common way of terminating this possessory interest is to join in the deed . . . but it can also be terminated byabandonment. Abandonment can be established by sufficient evidence that the sellers have moved out, their furniture is gone, etc. I would not recommend relying on the “Pre-Nup” for several reasons. First, there is always thepotential issue of “adequate and full” disclosure, which is essential for the validity of such an agreement. Secondly, theagreement presumably addresses “ownership” rights or interests. The possessory interest may not be a right withinthat classification but, rather, a statutory right to have possession, even if owning “nothing”. In any event, I wouldnot rely on the Agreement to cut proceeds checks but, rather, make them payable to both husband and wife, leavingthem to split it any way they desire.

You must, however, check with your underwriter to see what policy they follow with regards to reliance on abandonment.

Your Expert.

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NJLTA WELCOMES A NEW CLASSOF CERTIF IED TITLE PROFESS IONALS

Kevin S. Cairns has been recognized by the New Jersey Land Title Association as a Certified TitleProfessional, its highest honor for Leadership, Competence, Experience, Service and Tenure in the NJLand Title Industry. Mr. Cairns attended Trenton State College where he earned his B.S. in 1988.He later attended Gonzaga University School of Law and obtained his Juris Doctrate in 1992. He hasbeen admitted to the New Jersey State Bar and holds his producers license issued by the Department ofBanking and Insurance. Kevin’s introduction to Title Insurance was through the firm of Lomurro,Davidson, Eastman and Munoz, under the direction of Edward Eastman Esq. where he handled titleclaims for various title insurance companies. He was later employed as assistant underwriting counselfor Commonwealth Land Title Ins. Co. and became State Counsel and State Agency Manager forFidelity National Title Ins. Co. Kevin joined First American Title Insurance Co. in March of 2003where he serves as Vice President and Underwriting Counsel. Kevin is a recent past president of theNew Jersey Land Title Association and has been an active member of the Association for over 15 years,serving in numerous capacities including Editor in Chief of The Advocate.

Gary Ham has been recognized by the New Jersey Land Title Association as a Certified TitleProfessional, its highest honor for Leadership, Competence, Experience, Service and Tenure in the NJLand Title Industry. Mr. Ham was graduated from the University of Scranton in 1978 with a B.S. inBusiness and was then employed by IBM Corporation in Endicott, NY. In 1984 Gary graduated fromWestern New England College School of Law with a Juris Doctor degree and was admitted to theNew Jersey Bar that same year.

Ham’s career in the title industry began in 1985 when he joined Commonwealth Land Title InsuranceCompany where he was Vice President and New Jersey State Counsel. In 1995 Ham became employedby Chicago Title Insurance Company as VP and Counsel before accepting a position as VP and NewJersey State Counsel for Lawyers Title Insurance Corporation in 1998. He is currently VP and NewJersey State Counsel for the Fidelity National Title Group.

Gary is a past president of the New Jersey Land Title Association and has been an active member ofthe Association for over 25 years, chairing and serving on numerous committees and special projects.Ham has also been a company representative to the New Jersey Land Title Insurance Rating Bureausince 1985 serving on both the Rate and Forms Committees.

Gary and his wife Linda reside in Sparta NJ and have two children, Michael and Nicole.

Mike Huddleston has been recognized by the New Jersey Land Title Association as a Certified TitleProfessional, its highest honor for Leadership, Competence, Experience, Service and Tenure in the NJLand Title Industry. Mr. Huddleston was graduated from the University of Oklahoma in 1976 with aBBA in Petroleum Land Management.

As a Landman in the West, Mike “rode the range” from New Mexico to North Dakota searchingrecords, buying and/or leasing mineral rights, negotiating drilling contracts and operating agreements.After a brief hiatus due to the suspension of domestic drilling in the 80’s, Mike returned to his roots, asa title searcher in Morris County. In 1993 he assumed the position of Title Officer with Trans-County Title Agency, LLC in New Brunswick and eventually became its Owner.

Mike became involved with the NJLTA in the late 90’s and was elected to the Agency SectionManagement Board in 2002. In 2003 he was Certified as a NJ Title Instructor by the NJ Dept ofBanking & Insurance. Rising through the chairs he served as Chairman of the NJLTA, AgencySection and is currently serving the Association as the Secretary/Treasurer. Mike has been active inteaching pre-licensing education for the NJLTI and continuing education with the Central Title School.

Mr. Huddleston lives in Interlaken with his wife Susan and two daughters, Samantha and Mackenzie.

Kevin S. Cairns, Esq., CTP

Michael Huddleston, CTP

Gary Ham, Esq., CTP

In recognition of Lydia’s long, devoted and venerable service to the NJ title industrythe New Jersey Land Title Association has bestowed upon her the title of HonoraryMember. Previously known to all as Lydia Fowler, she has devoted over 30 years ofservice to the title insurance industry in New Jersey. Hired as an accounting managerfor Ticor Title Insurance Company in 1978, she quickly distinguished herself androse to the position of New Jersey State Manager overseeing state agency operationsfor Old Republic National Title Insurance Company and then Stewart TitleGuaranty Company. For over 20 years as a State Manager, she welcomed, encouragedand supported countless new agents and underwriter personnel into the industry.Her activities included service to the NJLTA and the Rating Bureau in virtually everycapacity and on every committee. Lydia is a past President of the NJLTA; she took anactive role in the filed rate and form approval process with the NJ Department ofBanking and Insurance; she spearheaded the updating and amendment of the NJLTAConstitution and By-Laws; and served as the Editor of The Advocate, breathing newlife into this publication. Lydia received the Certified Title Professional designationfrom the NJLTA in June of 1996.

HONORARY MEMBER SHIPBESTOWED UPON LYDIA BELL , CTP

Lydia Bell, CTP

NOTARY QUIZ

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The Title Academy of New Jersey Established 1995

Offering quality continuing education courses both online and live presentations

Discounts available on orders of multiple credits

Log in to see why we are user friendly, convenient and dedicated to serving our

students with a personal touch

Always Open!

www.online.titleacademyofnewjersey.com

SITUATION: A signer requests you notarize a document that was prepared in another state. As youstart to complete the certificate wording on the document, you discover that someone has alreadyfilled in part of the venue information before bringing the document to you, and the wrong countyand state are listed. What should you do?

ANSWER: The venue on the certificate wordingshould always indicate the location where the notarization took place. In this situation, the Notaryshould line through the incorrect information, writein the correct county and state, and initial and datethe correction.

NJ TITLE INSURANCE POLIT ICAL ACTION COMMITTEE

Ever wonder what NJTIPAC does? How it benefits our industry?

The New Jersey Title Insurance Political Action Committee (NJTIPAC) is the collective voiceof the New Jersey title insurance industry. NJTIPAC is dedicated to building, developing and maintaining relationships with New Jersey politicians, while educating and advocating on behalfof the New Jersey title industry.

Your contribution to NJTIPAC is vital to our efforts in Trenton. Continued support of NJTIPAC by every NJLTA member is imperative to our success. It doesn’t have to be much.

Your support of NJTIPAC has facilitated our success in supporting or preventing legislationthat directly impacts the New Jersey title industry. The NJLTA has a new lobbying firm, PublicStrategies Impact, LLC. You can visit them online at www.njpsi.com.

Come to the silent auction at the convention, walk away with a valuable item and make your contribution to NJTIPAC.

We need your support!

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“Hold tight. We’re in for nasty weather. There has got to be a way.” – Lyrics from Talking Heads’“Burning Down the House”

Paradigm ShiftThe real estate financing paradigm shift is becoming clearer with the now front-burner onset ofproposed “Qualified Residential Mortgage” (QRM) requirements, a key provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act passed last year.

In one of the original sponsor’s own words: “The purpose of the Qualified ResidentialMortgage is to create a clear framework for high quality underwriting and safe loans that willattract private investment capital back into the mortgage market.” The [QRM] provisionrequires lenders to fully document a borrower’s income and assets, verify that they have acceptable debt-to-income ratios and are capable of repaying their loans. Mortgages that meetthe Qualified Residential Mortgage definition would be exempt from the risk retention requirements of the Dodd-Frank law, thereby providing an incentive for lenders. In turn, borrowers with these mortgages could avoid the added costs that would trickle down to themfrom their lender. – The Hill’s Congressional Blog, 2/15/11, by US Senator Johnny Isakson (R-Ga)

FDIC’s Rules of Engagement The QRM rules of the road, or more accurately, the rules of engagement, have been left up tothe regulatory bureaucracy in Washington, DC. The regulators (FDIC, HUD, FHFA, SEC,Federal Reserve and Comptroller of the Currency) have issued their proposed guidelines. A20% down payment is the threshold that the regulators are proposing for the QRM. Further,they are proposing that an interest rate reduction refinance application reflect at least 25% equity in the house value to qualify, and a so-called “Cash-out” refi and second home refinancereflect at least 30% equity in the property based upon appraised value.

FDIC Chairperson Sheila Bair states in a March 29, 2011 press release (www.fdic.gov/news):In thinking about the impact of this proposed rule, we need to keep in mind the following facts:

• First, the QRM requirements will not define the entire mortgage market, but only that segment that is exempt from risk retention. Lenders can – and will – find ways to provide credit on more flexible terms, but only if they then comply with the risk retention rules.

• Second, what matters to underserved borrowers is not just the volume of credit that is available, but also the quality of that credit. More than half of the subprime loans made in 2006 and 2007 that were securitized ended up in default, which hurt both borrowers and investors and triggered the financial crisis. By aligning the interests of borrowers, securitizers and investors, our new rules will help to avoid these outcomes and keep default rates at much lower levels. They will also help avoid another securitization-fed housing bubble which made home prices unaffordable for many LMI borrowers.

• Finally, the private securitization market, which created more than $1 trillion in mortgage credit annually in its peak years of 2005 and 2006, has virtually ceased to exist in the wake of the crisis. Issuance in 2009 and 2010 was just 5 percent of peak levels. This market

QUALIF IED RES IDENTIAL MORTGAGE : RESHAPING THE REAL ESTATE FINANCING PARADIGM

By Richard Eland, President, Title Village

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needs strong rules that assure investors that the process is not rigged against them. The intent of this rulemaking is not to kill private mortgage securitization – the financial crisis has already done that. Our intent is to restore sound practices in lending , securitization and loan servicing, and bring this market back better than before.” (emphasis added)

Industry Responses to Proposed QRM RuleNote: June 10th is the final response date for the 60-daypublic comment period before the agencies make a finaldecision.

Trade Associations’ White paper (www.nahb.org):“Proposed QRM Harms Creditworthy Borrowers AndHousing Recovery” headlines the recent white paper issuedby a group of trade association members, led by theNational Association of Home Builders; the NationalAssociation of Realtors and the Center for ResponsibleLending , critiquing this FDIC announcement. This industry white paper underscores the negative impact ofthe strict QRM rules:

“In the midst of a very fragile housing recovery, the government is throwing a devastating, unnecessary and very expensive wrench into the American dream. First time homebuyers will have to choose between higher rates today or a 9-14 year delay while they save up the necessary down payment. And 25 million current homeowners would be locked out of lower refinancing rates because they lack the required 25 percent equity in their homes.”

“High down payment and equity requirements will not have a meaningful impact on default rates. But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily high rates. The government is penalizing responsible consumers, making homeownership more expensive or simply out of reach for millions. We urge regulators to develop a final rule that encourages good lending and borrowing without punishing credit-worthy consumers.”

ALTA (www.alta.org/press):Our own national trade association, American Land TitleAssociation, issued a March 30th press release: “The federalgovernment’s attempt to promote high quality mortgageloans through its “qualified residential mortgages” willerode collateral underwriting standards and drasticallyaffect access to affordable loans for creditworthyAmericans. By proposing an artificially narrow QRM andrequiring a minimum 20 percent down payment, millionsof creditworthy borrowers will only be elig ible for mortgages with higher interest rates and fees and withoutthe protections against risky loan features,” as stated byKurt Pfotenhauer, CEO, ALTA.

“Central to facilitating a housing and economic recovery isensuring access to conventional mortgage credit for allqualified buyers and refinancers, including low- and moderate-income households, minority families, and first-time buyers, while preserving high quality, empiricallysound underwriting and product standards. The QRMwill shape the future of the mortgage market by determining the types of mortgages commonly available toborrowers. The Dodd-Frank law exempts FHA and VAloans from the risk retention requirement and the proposed risk retention rules will not apply to FannieMae and Freddie Mac while they remain in conservatorship. This proposal will move a substantialamount of business from the private sector to the government driving more borrowers to the FHA. Itcould also mean further consolidation among lenders,thus disrupting competition in the mortgage industry.”(emphasis added)

Conclusion: I don’t know about you, but I’m dusting offmy old copy the movie “Network” (tip of the hat to lategreat Sidney Lumet, director, who just passed away). I amabout to have a Howard Beale moment: “I’m mad as hell,and I’m not going to take it anymore.”

“Well we know where we’re goin’. But we don’t knowwhere we’ve been . . . And the future is certain. Give us timeto work it out.” – Lyrics from Talking Heads, “Road to Nowhere.”

1099 RepealOn Thursday, President Obama signed into law legislation endorsed by ALTA and many others to repealthe 1099 reporting requirements in the health care reform act that required business to report to the IRSany purchases for goods and services totaling more than $600.

Private Transfer Fees Congratulations to Washington State and Montana on becoming the 25th and 26th state to ban orrestrict private transfer fees.

Qualified Residential Mortgages The comment period for the banking regulators’ new QRM rules doesn’t end until June 10th, but if theHouse Financial Services Committee hearing is any indication, the regulators should be bracing for anearful. The officials from the FDIC, Federal Reserve, FHFA, FHA, OCC and SEC who went up toCapitol Hill to explain their rule got bombarded with criticism from all sides, including poignant disapproval from the Senators who wrote Dodd-Frank’s QRM requirement.

Some of the strongest criticism is in response to the proposed 20% downpayment requirement whichwould prevent a large segment of borrrowers from qualifying for a QRM loan.

Consumer Financial Protection Bureau CFPB czar Elizabeth Warren announced at a meeting of state Attorneys General that she expects 20 newregulations to be ready by April 2012. The CFPB’s first draft of new mortgage disclosure forms is expected to become public in May.

Foreclosure SettlementFederal regulators took action against eight large mortgage servicers, LPS and MERS for irregularities inthe foreclosure process. The result is this series of consent orders that require the servicers to revamptheir foreclosure processes, including ending the dual tracking of foreclosures and modifications, creatinga single point of contact for borrowers, improving third party oversight and compensating borrowerswho were wrongfully foreclosed upon.

ALTA submitted a brief in the highly anticipated follow-up to January’s Ibanez decision. In Ibanez, theMassachusetts Supreme Judicial Court invalidated some foreclosures because the lender could not proveit held the mortgage; however, it left open the question of what effect an improper foreclosure shouldhave on the title of a third party who purchased the property at the foreclosure sale.

Housing Policy & DataRates for 30-year fixed-rate conventional mortgages dropped for the first time in five weeks 11 basispoints to 4.80 percent.

It appears a recovery in commercial real estate is taking hold. With building occupancy stabilizing, landlords are able to pay down loans allowing commercial mortgage defaults to dip for the first time since 2005.

In response to complaints from frustrated home sellers, Rep. Tom Rooney (R-Fla.) and Rep. RobertAndrews (D-N.J.) have introduced legislation to improve the short sale process. The bill requires servicers to respond within 45 days of a short sale request.

ALTA NewsWith all of the changes impacting the mortgage and real estate market, now is the time to hear fromindustry experts and learn the latest tactics to help your company become more efficient, expand its footprint and remain compliant at ALTA’s 2011 Business Strategies Conference, which will be held May8-10 at the brand new Cosmopolitan of Las Vegas.

State leaders got together by teleconference last Tuesday to discuss agent bonding and capitalization legislation recently introduced in several states, the impact on title operations of cutbacks at countyrecorders officers, state efforts to hold insurers strictly liable for their agents and closing delays caused byOffice of Foreign Assets Control (OFAC) checks.

ALTA ADVOCACY UPDATE

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Highlights from Kurt Pfotenhauer, Chief Executive Officer

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IN THE NEWS

Don’t forget that the NJLTA Agency Section has a page on FaceBook.It will keep you informed about what is going on in the industry. EnterNJLTA in the search field to locate the page.

You may also be interested in the after-the-convention posts on Facebook at the 2011 New Jersey Land Title Association Business andEducation Convention page. Enter New Jersey Land Title Associationin the search field to locate that page.

Interested in “The Dodd-Frank Wall Street Reform and ConsumerProtection Act?” The congressional Budget Office’s director blogsabout it at: http://cboblog.cbo.gov/?p=2105

Want another perspective? Check out http://www.calculators4mort-gages.com/ and under “Recent News Posts,” check out “Buying a newhome? Will you need 20 percent down payment?” for a take on howthe legislation may impact homebuyers.

Another interesting post about how the new regulations may impactconsumers can be found at: http://moneywatch.bnet.com/economic-news/. Type “mortgage car loan” in the search field to locate, “Why theCost of Your Mortgage and Car Loan May Be Headed Higher”.

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NJLTA STANDING & SPECIAL COMMITTEES -WHICH ONES INTEREST YOU?

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DATES TO REMEMBER

9th Continuing Education – Grabas Institute for Continuing Education Markups, Disbursements & Escrow Funds: Settlement Agent Ethics100 Willowbrook Dr, Bldg 1 – Freehold, New Jersey

21st Continuing Education – Grabas Institute for Continuing Education Ethical Challenges for the Title Producer: How to Tell Right From WrongClarion Hotel – Egg Harbor, New Jersey

21st Continuing Education – Grabas Institute for Continuing EducationCondos, Co-Ops and 99 Year Leases: Alternative Property OwnershipGrabas Institute – Edison, New Jersey

18th Continuing Education – Grabas Institute for Continuing EducationEthical Challenges for the Title Producer: How to Tell Right From WrongGrabas Institute – Edison, New Jersey

13th Continuing Education – Grabas Institute for Continuing EducationTitle Masters: A Title Agent Symposium Wyndham Hotel – Mount Laurel, New Jersey

18th Agents and Abstractors Forum American Land Title AssociationEmbassy Suites Hotel – BWI, Linthicum Heights, Maryland

21st NJLTA - Board of Governors Meeting 100 Willowbrook Road, Bldg 1, Freehold, New Jersey

22nd Continuing Education – Grabas Institute for Continuing EducationPlanes, Trains, Boats & Automobiles: Transportation & Land Titles Ramada Inn – East Hanover, New Jersey

26th NJLTA Agency Section Meeting and Continuing Education SeminarHoliday Inn – East Windsor, New Jersey

6th Continuing Education – Grabas Institute for Continuing Education Meet the Tax Collector: NJ Real Estate Tax Issues Holiday Inn, East Windsor, New Jersey

12th – 15th Annual ConventionAmerican Land Title AssociationCharleston Place, Charleston, South Carolina

15th Continuing Education – Title Academy of New JerseySubjects to be Announced - Two (2) Three (3) Credit ClassesTrump Marina – Atlantic City, New Jersey

18th Continuing Education – Grabas Institute for Continuing Education Lasers, Orange Vests & Corner Markers: Basic Principles of Field Surveying Ramada Inn – East Hanover, New Jersey

3rd Continuing Education – Grabas Institute for Continuing EducationCartographer’s Apprentice: Use Of Maps in Title Insurance Wyndham Hotel – Mount Laurel, New Jersey

16th NJLTA Board of Governors Meeting100 Willowbrook Road, Bldg 1, Freehold, New Jersey

17th Continuing Education – Grabas Institute for Continuing Education Foreclosure Rescue & Other Lending Myths: Ethics & ObligationsClarion Hotel – Egg Harbor, New Jersey

22nd NJLTA, Agency Section Meeting The Offices of Trans-County Title in East Brunswick, New Jersey

6th Continuing Education – Grabas Institute for Continuing Education Masters of Chancery: Insuring Foreclosure Titles 100 Willowbrook Dr, Bldg 1 – Freehold, New Jersey

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A d v e r t i s e

Monmouth Executive Center100 Willowbrook Road, Building 1Freehold, New Jersey 07728

New Jersey Land Title Association Officers

Daniel T. May, [email protected]

William O. DeAscentiis, First Vice President656-795-4000 ext [email protected]

Amy Holder, Second Vice President973-515-0033 ext [email protected]

Michael Huddleston, Secretary/[email protected]

Edward C. Eastman, Jr., Exec. [email protected]

Agency Section Management Board

Steven Goldstein, Chairperson/TreasurerTrans-County Title Agency, [email protected]

Cynthia Ward, SecretaryTrident Abstract Title Agency, [email protected]

Casey M. BrownAmerican General Title Agency, [email protected]

Alfred D. Santoro, Jr., CTPEsquire Title Services, [email protected]

George A StickelStickel Title Agency, [email protected]

George W. Watson, Jr.Royal Title Services, [email protected]

Editorial Board

Joe Grabas, [email protected]

Richard L. Eland, [email protected]

Linda Martin, Blurbs & Blogs/People in the [email protected]

David Penque, ALTA/Industry [email protected]

Larry Bell, Front [email protected]

Nancy Koch, Human Interest973-541-2400, ext. [email protected]

Amy Holder, Advertising732-545-1003 ext [email protected]

Maureen Crowley-Unsinn, [email protected]

Policy

The views and opinions expressed by the authors of the published articles are those of the authors and NOT his/her employer. Consult your underwriterfor specific guidelines. NJLTA makes no endorsement of advertisers, nor takes responsibility for the content of the advertisements.

PRSRT STDUS POSTAGE

PAIDPRINCETON, NJPERMIT NO. 47

Reach out to over 1000 industry members! Inquire with Amy Holder at [email protected].

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THE OFFICIAL PUBLICATION OF THE NEW JERSEY LAND TITLE ASSOCIATION

THE OFFICIAL PUBLICATION OF THE NEW JERSEY LAND TITLE...

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